How long will the government pursue money it thinks belongs to it? Ask Gilbert Hyatt, who in 1970 invented a microprocessor computer chip which helped to spark the proliferation of computer technology. In 1990 he was awarded a patent for the processor and made a large profit as a result. Since then, California’s Franchise Tax Board has pursued him for $7.4 million in back taxes, which today has reached almost $55 million in fines and penalties. Hyatt was not even living in California when he received the money originally, but since he was before he received the patent, the state thinks they deserve a share.
“On Friday, Hyatt, now 76, filed a federal lawsuit accusing the state of violating his constitutional rights in pursuit of a sum that now tops $55 million as interest and penalties have accrued. He’s asking for an injunction forbidding the state from pursing its claim any further. After all these years and legal expenses, he just wants California to leave him alone already”
The Independent Institute points out that California’s high speed rail project is an example of bloated government:
As the report notes, last year California’s High-Speed Rail Authority nearly tripled its staff to 116 employees and payroll soared from $2.5 million to almost $7 million… The staff and payroll figures exclude “a variety of consultants,” who don’t work for a song.
The “bullet train” has yet to transport a single passenger at any speed. But the bullet train has already succeeded at bulking up government and giving politicians a new place to spend.
One school superintendent in California won’t be receiving any fan mail for a while, after local taxpayers learned of his exorbitant annual salary. The superintendent oversees only four schools and 6,637 students but makes $665,365 a year. His salary is completely ridiculous when compared to the superintendent of a nearby district who oversees 900 schools and 655,494 students, but makes $389,997 a year.
“In addition to the lucrative paycheck, the school board has also provided a sweetheart mortgage deal to help Fernandez buy his suburban home. This mortgage benefit – a $910,000 loan at just 2 percent interest – was especially helpful for Fernandez, given his financial troubles. Fernandez recently emerged from bankruptcy.”
“Learn to code” organizations in California are being threatened by the Bureau for Private Postsecondary Education (BPPE), a division of the California Department of Consumer Affairs. According to the BPPE, the coding organizations fall under its jurisdiction and are operating illegally without a license. The state says that so long as the organizations move towards compliance they won’t be shut down. However, the far from protecting Californians, this move towards licensing only stifles competition and raises prices for those seeking to educate themselves.
“The intent here may be admirable. There are various scam “post-secondary education” offerings that don’t really provide anyone anything of value and over promise what they’re offering. But coding bootcamps are something else entirely. The various groups are saying they’re interested in complying with whatever regulations are necessary, but are also worried about the cost and the time that it will take for this process to run its course. Bureaucracies aren’t known for their efficiency (or their inexpensiveness).”
According to a report from Franklin Center’s Watchdog, California’s Obamacare exchange spent $1.37 million on an eight-hour live web stream featuring multiple celebrities. In California every dollar counts when the state is facing a $78 million budget deficit. Despite this budget shortfall, the exchange has seen its budget increase by $33 million. It is unclear if the million dollar video will increase California’s enrollments.
“The Jan. 16 web video was filmed at a Los Angeles studio and included skits, tips and interviews. During the segment, [Richard] Simmons — wearing red tights and a black sequined tank top — was joined by a contortionist for a dance competition. Part of Simmons’ routine involved writhing on the ground and peeking through his split legs.”
The future of a $68 billion high-speed rail project in California has been left in doubt following multiple legal challenges, according to a report by Bloomberg Businessweek. Originally approved in 2008 at $10 billion, the rail project promised to have total funding for the first useable segment of track. Now a Sacremento County judge has ruled against the rail authority’s business plan and has rejected their request to sell $8.6 billion more bonds to help fund the project.
“They just paint a rosy picture, charge ahead, without acknowledging they have any serious issues to deal with or addressing how they’re going to deal with it,” said Michael Brady, one of the attorneys representing a group of Kings County residents who sued the state, leading to the judge’s rulings.
While it may lack the notoriety of Detroit, a small town in California also faces bankruptcy from a bloated government according to a report from Union Watch. The town of Desert Hot Springs has only 27,000 residents and 55 full-time government employees, yet the average salary for those employees plus benefits was $144,329 in 2011. The city spends $8.7 million on full and part-time employees plus another $6.6 million on contracted workers like firefighters. All told, the city spends 84% of its budget on employees and contractors.
“After closing down a public swimming pool, laying off school crossing guards, and discontinuing any watering of the city’s parks, Desert Hot Springs still expects to spend 30% more than it makes, a deficit of $4.2 million.”
California’s high-speed rail project faces a large setback after a judge declared that the project needs more analysis before it can tap certain bonds. From the Associate Press:
Sacramento County Superior Court Judge Michael Kenny rejected a request from the California High-Speed Rail Authority to sell $8 billion of the $10 billion in bonds approved by voters in 2008, saying there was no evidence it was “necessary and desirable” to start selling the bonds when a committee of state officials met last March.
He said the committee, which included state Treasurer Bill Lockyer, was supposed to act as “the ultimate `keeper of the checkbook’” for taxpayers, but instead relied on a request from the high-speed rail authority to start selling bonds as sufficient evidence to proceed.
The Los Angeles Times reports that the FBI is looking into the activities of a lawmaker with regards to a tax credit proposal he made. From the article:
Calderon pushed to extend tax breaks to productions of less than $1 million. He and family members received a total of $10,800 in campaign contributions from an independent producer who could have benefited from the change Calderon advocated.
Although California recently created regulations that would permit ridesharing groups like Lyft to legally operate in California, Los Angeles International Airport is forbidding them from operating. The issue revolves around fees the airport collects from cab drivers, which some ridesharing groups tend not to collect. From Los Angeles Daily News:
Most saw the decision as carte blanche for ride-share drivers to pick up customers anywhere in California. But that’s not true. The decision left intact regulations that allow airports to decide who may pick up on their property.